World Finance Watch

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Zoomerz

Member
Messages
220
World Finance Watch

Starting this thread as a general finance watch. World financial news that affects us.

World Bank Warns U.S. to Cut Deficits

1 hour, 7 minutes ago
?
PARIS (Reuters) - Accumulation of dollar reserves by some Asian countries could spark a systemic foreign exchange crisis, the chief economist of the World Bank said in an interview to be published on Thursday.

Francois Bourguignon told the Les Echos newspaper it was too early to talk of a speculative bubble but that the United States had to cut its deficits to head off a crisis. The paper released the text of the interview ahead of publication.

\"For the moment I would not speak of a speculative bubble but of the danger of a systemic crisis linked to the accumulation of foreign exchange reserves,\" Bourguignon told the paper.

\"Some countries, particularly Asian ones, have no interest in the parities of major currencies being modified. As a result, they are financing the enormous American current account deficit.

\"Today, the danger is that some dealers are starting to think they must change the rules of the game, play dollar depreciation and move toward the yen and the euro. That would confront us with a real systemic risk.\"

Cutting the U.S. deficit was key, Bourguignon said. The World Bank foresaw an orderly adjustment with the United States announcing a progressive reduction in its budget deficit accompanied by interest rate rises.

\"Too drastic a program would plunge the United States into recession,\" he said.

Recent pronouncements by Alan Greenspan, chairman of the U.S. Federal Reserve, suggested things were changing, he said, but \"we are at the mercy of the nervousness of market dealers.

\"Today, no catastrophe is anticipated in the coming six to nine months. So I am not yet totally pessimistic,\" Bourguignon added.

http://story.news.yahoo.com/news?tmpl=stor...ex_worldbank_dc

The Wolfowitz nomination looms larger....

Z-
 

CaryP

Senior Member
Messages
1,438
Re: World Finance Watch

Oh God, Zoomerz. You went an opened a financial news thread. I could flood the place, but I won't. I'll try and post the "real important" stuff. Did you see Greenspan's comments about Fannie and Freddie today? He's recommending they be taken down a peg or two cause they've gotten too big. No kiddin' Al? Really? When did you notice you bonehead?! I just hope some of the folks around here want to participate. Most people have no idea about how "bad" it can or should get over the next couple of years. But we'll see.

Cary

P.S. Wolfowitz got a unanimous confirmation. The Europeans didn't like it, but they held their nose and did it anyway. Bush must be a happy man.
 

Zoomerz

Member
Messages
220
Re: World Finance Watch

Really Cary, when I posted, I had no idea you'd be so interested! [:wink] ....

I did hear his remarks on F/F . And also that market forces should be left to correct themselves (oil). Doesn't that imply they normally aren't "left alone"? hehe.

Reading this article, it becomes just a little clearer why Bush was looking for friends at the World Bank.

I just think the world financial situation (especially concerning the unstable reserve situation) needs watching, and I'm REALLY looking forward to your posts. That's how I sound so impressively knowledgeable when my friends are around!

Z-
 

CaryP

Senior Member
Messages
1,438
Re: World Finance Watch

<div class='quotetop'>QUOTE(\"Zoomerz\")</div>
Really Cary, when I posted, I had no idea you'd be so interested! [:wink] ....

I did hear his remarks on F/F . And also that market forces should be left to correct themselves (oil). Doesn't that imply they normally aren't \"left alone\"? hehe.

Reading this article, it becomes just a little clearer why Bush was looking for friends at the World Bank.

I just think the world financial situation (especially concerning the unstable reserve situation) needs watching, and I'm REALLY looking forward to your posts. That's how I sound so impressively knowledgeable when my friends are around!

Z-[/b]

LOL Zoomerz. I'll post what I can. The global "financial situation" is so screwed, it deserves more than "watching." But we'll see how long this takes. The central bankers will be hard at work trying to keep the game going. In the end, it's out of their control. You can jack with markets all day long, but in the end they go where they want to. The financial imbalances in the global and US economies will have their reckoning day, and it won't be pretty. The longer they keep the game running, the worse the outcome. We'll be "looking" at what comes down. But it ain't pretty from my end.

Cary
 

CaryP

Senior Member
Messages
1,438
Re: World Finance Watch

If anyone was thinking the job market is getting tough, you're right. This is an interesting article on the offshoring of "white collar" jobs at an alarming rate, and it's just getting started. This will contribute to the lowering of the standard of living the the Western, industrialized economies of the US, Europe and Japan, while raising standards of living in India, China and other Asian low cost providers. Better have some "new and improved" skills to stay competitive in the coming job environment. And I'm not talking about numchuck skills, bow hunting skills or computer hacking skills. The article is pretty long, so I'll copy parts of it, but I encourage those of you who give a rat's ass to read the whole thing from the link below.

Cary

http://www.feer.com/articles1/2005/0503/free/p019.html

The Next Wave Of Offshoring
March 2005

? ?By Robyn Meredith

? ?As Sumer Shankardass is driven through Bombay, barefoot beggars tap on ? his car windows at stoplights, asking for money, but the 36-year-old Indian ? entrepreneur ignores them. He is concentrating. A press release issued in London ? has caused his cell phone to beep half a world away. He glances at the text ? message on his phone and breaks into a victorious grin. He leans over to tell ? the others in the car the good news: Norwich Union, the large British insurance ? company, is laying off 900 people in the United Kingdom.

? ?Mr. Shankardass knows these jobs?and 3,000 others which were subsequently ? earmarked by Norwich for offshoring?are headed for India. That can only mean ? good news for wns Global Services, the Indian outsourcing company where he works ? as a senior vice president. In 2004, his was one of three India-based companies ? awarded outsourcing contracts by Norwich's parent company, Aviva.


Around the world, a quiet revolution is taking place. It wasn't planned, it ? isn't political. But it is steadily marching, some might say leaping along, ? and-even if we wanted to-it can't be stopped. The revolution's name is ? offshoring, and while the concept is not new-manufacturing jobs have been moved ? to countries such as China and Mexico for years-what is different of late is the ? huge number of white-collar jobs that are being relocated abroad, and at a tempo ? and scale never witnessed before.

? ?And it's just starting. Over the next decade, offshoring will knock millions ? of white-collar Americans and Europeans out of work, blowing a hole in the ? middle class from Los Angeles to London, from Boston to Berlin, from Toledo to ? Tokyo, from Austin to Amsterdam.

? ?\"I don't think most people appreciate the magnitude of the change in the ? world's workforce,\" says Intel's chief executive, Craig Barrett. \"Over the next ? 10 years you are going to see major, major dislocation,\" he warns. He should ? know. Intel is hiring thousands of new workers overseas.

? ?Big and small companies alike in industry after industry have done the math ? and are rushing to move even their most specialized jobs to Asia to cut wages by ? between half and four-fifths. \"We're now outsourcing investment banking to ? Mumbai,\" says Stephen Roach, chief economist at Morgan Stanley. \"I don't know ? why we would ever hire another software programmer in New York again.\"


This is the next wave of globalization, and it is shifting work to ? dollar-a-day factory workers and dollar-an-hour white collar workers in Asia. ? Alarm bells should be ringing for Americans and, even louder for Europeans: Fat, ? rich and spoiled Westerners have for several generations been shielded from ? workplace competition with the world's most populous nations. As both China and ? India open to the world for business, and advanced communications technology ? becoming more and more widespread, some one billion workers have suddenly been ? added to the world's labor pool. With an increase in the number of Asians ? qualified for white-collar jobs, people in the industrialized nations are ? suddenly discovering their high Western wages are no longer competitive.

? ?There is no single, authoritative source on the number of U.S. jobs lost to ? offshoring. In recent years, about 100,000 software-writing jobs have moved from ? the U.S. to India alone, according to the Economic Policy Institute. Those jobs ? would have paid a combined $136 billion a year in wages. By the end of 2005, one ? of every 10 jobs at U.S. information technology vendors and service providers ? will have moved offshore, according to data from the Bureau of Labor Statistics, ? Gartner and Morgan Stanley. Another 400,000 back-office jobs have already moved ? offshore and 3.3 million should move by 2015, according to Forrester Research. ?

? ?Vivek Paul, vice chairman of Indian IT giant Wipro, figures that over the ? next five years, 7% of U.S. white-collar jobs could be moved overseas, and a ? whopping 60% of software jobs. \"There's very little economic rationale for ? having those jobs in the U.S.,\" he says.


Cruel to Westerners, offshoring is cause for celebration in Asia. This ? migration of jobs is one of globalization's greatest achievements-a fast-rising ? living standard in poor countries that is propelling better-educated Asian ? workers into an expanding middle class.

? ?J.P. Morgan's new back office?a place where hotshot MBAs crunch numbers on ? stocks traded in New York, London and Tokyo?is nowhere near those legendary ? banking centers. Instead, it is in Bombay, India, across the street from a ? desperate slum.

? ?In glittering London and New York, those who win coveted first-year ? investment banking jobs earn $150,000 a year and buy Porsches with their ? bonuses. Soon, there will be far fewer of them: Last year J.P. Morgan began ? hiring in Bombay at just $25,000 a year-not enough for a Toyota. Already there ? are 2,000 bankers and researchers in India, and within a few years, the ? company's plans call for up to 8,000 in India?half in Bombay and half in a new ? office planned for Bangalore.


In Shanghai and Kuala Lumpur, in Delhi and Bombay, white-collar denizens of ? the offshoring boom now gather at hip bars and pricey restaurants. It is as if ? the exuberance of Silicon Valley has moved to Asia. They spend their new ? paychecks on trendy Western clothes, trips abroad and new cars. Every month, two ? million more Indians and five million more Chinese carry cell phones as their ? countries grow richer. Young college graduates job-hop for ever-higher pay. The ? future has never looked brighter. While Chinese computer programmers splurge to ? buy the latest consumer goods, many will live with their parents until they are ? in their 30s, saving three-quarters of their $5,000-a-year salaries to buy a ? home or a car. That is not a sacrifice for them. It is an improvement.


How did the vast movement of white-collar jobs come about? The Internet and ? other tech wizardry invented in the U.S. inadvertently laid the groundwork for a ? great leap forward in globalization.


China and India aren't the only ones trying to get in on the offshoring ? action. Call it revenge of the colonies, but any developing country with lots of ? English speakers and good Internet links is now a prime jobs magnet. Malaysia ? razed a jungle full of palm oil trees to build a high-tech industrial park to ? woo companies. The search for cheap office workers has led HSBC, Nokia, NTT, ? Shell, Cisco, Ericsson, Fujitsu, Cable & Wireless and more than 250 other ? foreign companies there. Philippines President Gloria Macapagal Arroyo has ? traveled to New York and London to encourage companies to move call center jobs ? her country. With hourly pay rates in Asia averaging at $1, it's easy to see the ? region's appeal.

? ?However, China and India are particularly well positioned to attract foreign ? companies. Together, they produce four million college graduates a year, twice ? as many graduates as the U.S. and Europe combined. Whereas a decade ago, only a ? handful of China's top universities offered computer science degrees, with ? students trained in obsolete techniques, today executives from Microsoft lecture ? at Chinese universities?to ensure the company will have a qualified pool of ? techies to choose from when it hires. Gaining entry to one of India's ? distinguished Indian Institutes of Technology is said to be 10 times more ? difficult than getting into Harvard.

? ?It isn't just computer jobs that are moving to Asia. Many back-office jobs at ? banks, telecom companies and most other big companies are on the move. In one of ? the many new Shanghai skyscrapers, a chart runs the length of one wall in an ? HSBC office. There, a dozen people plan how the bank will go about moving ? hundreds of jobs to Shanghai. Starting with jobs moved from Hong Kong and ? Singapore, customer-support jobs are tracked: 10 jobs will move one month, 23 ? the next, and so on. Layoff tributaries scattered around the world are ? converging into a river of new jobs in Shanghai. ?
 

CaryP

Senior Member
Messages
1,438
Re: World Finance Watch

And just to make sure everyone knows who not to count on when the SHTF, here's another one for you. I copied almost all of it. Bold print is my emphasis.

Cary

http://www.newswithviews.com/Vieira/edwin6.htm


DON\'T ? ? ? ? ? ? ?COUNT ON WASHINGTON TO PROTECT US FROM LOOMING BANKING CRISIS</span>

? ? ? ? ? ? ?

? ? ? ? ? ? ?

? ? ? ? ? ? ?

? ? ? ? ? ? ?

? ? ? ? ? ? ?
Dr. ? ? ? ? ? ? ?Edwin Vieira, Jr., Ph.D., J.D.
? ? ? ? ? ?April 5, 2005
? ? ? ? ? ?NewsWithViews.com

?


?
Time runs out for every one and every thing. The sand in the hourglass is draining particularly quickly, though, for America\'s present monetary and banking systems. One need not be a bloodhound to sniff the scent ? ? ? ? ? ? ?of crisis in the air.

? ? ? ? ? ?​
?
Inasmuch as the monetary and banking systems are the creatures of politicians in Washington, D.C., and as a matter of law are totally subject to their control, the natural inclination of all too many Americans is to presume that the Wise Men on the Potomac will take timely and thorough action either to prevent a crisis from breaking out at all, or (if a crisis proves to be unavoidable) to protect common Americans from financial ruin and to preserve this country\'s national independence and free institutions. Such thinking, however, is dangerously naive--and may possibly prove fatal.

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Under present conditions, the General Government will not provide a proper solution to a monetary and banking crisis, because the denizens of the Capitol, the White House, and the Treasury are the primary perpetrators of the problem. True, as a matter of law the Constitution delegates to the General Government plenary power to reform the monetary and banking systems--to reintroduce silver and gold as the government\'s exclusive media of exchange, to separate bank and state, to prohibit or strictly regulate the inherently fraudulent practices of fractional-reserve banking, to withdraw the United States from all international and supra-national monetary and banking schemes, and so on. But law and fact are two different matters.

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All the legalities of We the People\'s Constitution are beside the point because, as a matter of fact, the General Government is no longer We the People\'s obedient agent. Rather, it is the tool of America\'s Establishment. Of course, this conglomerate of high finance, big business, officials of organized labor (especially among public-sector employees and public-school teachers), the neo-Marxist intelligentsiia in academia and the media, and a myriad of special-interest pressure-groups (the so-called \"nongovernmental organizations\" that propose to solve every problem with more governmental intervention) can claim no legal authority to control the General Government. That authority remains--at least on paper--in We the People\'s hands. Nonetheless, the Establishment enjoys the ability in fact, time and again, to place its minions in the most important positions of political power. That being so, it is as sure as death and taxes that, absent a political renversement ? ? ? ? ? ? ?in this country, the General Government will continue to do the Establishment\'s ? ? ? ? ? ? ?bidding. ? ? ? ? ?
?
Nowhere will the Establishment demand the General Government\'s lap-dog subservience more than with respect to money and banking. For the Establishment\'s power in every domain largely depends upon its control over--and ability to draw unearned profits from--the coffers of money and banking. (Always remember that the two greatest powers of government are \"the power of the purse\" and \"the power of the sword\". Control over one very often results in control over both.) ? ? ? ? ?
?
The Establishment did not originally gain power in this country, and certainly has not maintained its dominant position through thick and thin, by blinding itself to salient facts. Doubtlessly, therefore, the Establishment understands full well that America\'s present monetary and banking systems are inherently and fundamentally flawed, and becoming increasingly unstable--and that some sort of crisis is inevitable, unavoidable, and probably impending. Doubtlessly, too, the Establishment realizes that no amount of competence in the supposedly \"expert\" officials in the Federal Reserve can for much longer \"manage\" the Ponzi scheme they administer. (Actually, any reliance on supposed \"competence\" in such people would be misplaced in any event. No amount of competence in central planners can solve the problem of the absence of rational economic calculation inherent in socialism. Therefore, simply by being fractional-reserve central bankers, and to that extent central planners, these people demonstrate their incompetence.) The Titanic was designed ? ? ? ? ? ? ?to be unsinkable, but nevertheless sank. In the long run, no scheme ? ? ? ? ? ? ?of fiat currency ever launched has failed to sink, no matter how it was designed, or on what course it sailed. So why should anyone--especially the Establishment, which selects the ship\'s captain, officers, and crew--believe that the Federal Reserve System is not bound for the bottom, too?

?
That being the case, what is the Establishment--and, at its behest and for its benefit, the General Government--likely to do? The Establishment will do whatever is necessary and sufficient to maintain its iron-fisted control over money and banking, whether that entails attempting to preserve the regime that now exists, or bringing some entirely new scheme into existence, and no matter how much in treasure--and lives--such maneuvers may cost everyone else.

?
Also not beyond the realm of possibility would be for the Establishment to trigger (or simply do nothing to prevent) the collapse of the monetary and banking systems in a full-blown depression, coupled with acts of aggression (so-called \"preemptive strikes\") by the General Government\'s armed forces overseas that ignite a world war. Properly managed, a depression and world war would result in massive redistribution of real wealth from common Americans to the Establishment and its clients, while the victims found themselves so severely regimented by the General Government\'s exercise of wartime \"emergency\" powers that they could not effectively complain. One need not be overly suspicious to suggest ? ? ? ? ? ? ?a sequence that history already partly bears out: World War I, the League of Nations, and the undermining of the international gold standard--followed by World War II, the United Nations, the adoption of Federal Reserve Notes as the world\'s reserve currency, and the \"demonetization\" of gold and silver as currencies--followed by World War III, a New World Order based on the tripartite division of the globe into European, American, and Asian blocs, and a supra-national world central bank emitting a world fiat currency.

? ? ? ? ? ?​
?
A strategy based upon intentionally bringing about a depression is perhaps unlikely, however, because a depression is extraordinarily destabilizing, economically, socially, and politically. Once the bottom falls out of the economy, no one can be sure that desperate people with nothing to lose will not follow radical leaders whom the Establishment cannot co-opt, control, or center in the cross-hairs of some \"lone gunman\" who amazingly wields an inaccurate Mannlicher-Carcano rifle with Olympic precision. Yet such a strategy is not impossible (and may be necessary if the Establishment foresees a depression as unavoidable)--which perhaps explains why the General Government is so assiduously militarizing State and local police forces throughout the country, under the guise of integrating them into a national program of \"homeland security\". ? ? ? ? ? ? ?

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In any event, two things the Establishment--and the General Government, while it remains under the Establishment\'s thumb--will never do of their own free will: (i) return the United States to constitutional money of silver and gold, and (ii) eliminate or severely regulate the inherently fraudulent practices of fractional-reserve banking. But one thing the Establishment will always do: deploy the General Government to stab in the back any attempts at true monetary and banking reform--thus prolonging the present mess beyond any hope of rectification along the lines of sound money, honest banking, individual freedom, and national independence. Such, after all, is the pellucid lesson American history teaches: At every crucial point since the outbreak of the Civil War--1862-1864 and 1871 (emission of the first United States fiat currency and creation of the National Banks), 1913 (creation of the Federal Reserve System), 1933-1935 (destruction of the domestic \"gold standard\", and repudiation and prohibition of obligations payable in gold), 1964 and 1967-1968 (debasement of silver coinage and repudiation of paper currency redeemable in silver), and 1971 (destruction of the international \"gold standard\")--Congress, the President, and the Judiciary have wrapped this country more securely than before in the coils of unsound money and dishonest banking, both domestically and internationally--while at the same time enabling the Establishment to exert an ever greater, ever more pernicious influence over every American\'s economic and political life.

?
Have ? ? ? ? ? ? ?the American people no recourse, then? Is this country not a \"democracy\"? Cannot political action at the \"grassroots\" level force politicians to reform the monetary and banking systems before it is too late? Unfortunately, the answer is \"probably not\", for several reasons. ? ? ? ? ? ? ?

? ? ? ? ? ?​
?
First, America is no \"democracy\". The Constitution--which is the definitive authority on the nature of government in this country--provides that \"[t]he United States shall guarantee to every State in this Union a Republican Form of Government\". Article IV, Section 4. A \"Republican Form of Government\", not a \"democracy\". And the complex structure of the General Government plainly reveals that it is no simple \"democracy\", either. The Establishment\'s mouthpieces constantly harp on supposed \"democracy\" in this country in order to confuse Americans into believing that they have somehow agreed to whatever elected officials choose to do. In a constitutional republic, though, even if an individual votes for a particular politician, he does not thereby agree with, and is not bound by, that politician\'s later unconstitutional acts in office, because such illegal acts are beyond any officeholder\'s authority. Moreover, no citizen in a constitutional republic has any right to vote for any politician knowing and intending that he will misuse public office to violate the Constitution. Such a vote constitutes participation, not in \"democracy\", but in a criminal conspiracy. Thus, if true reform is possible at all, it must come through Americans\' intentional enforcement of the Constitution, which will require even ? ? ? ? ? ? ?more thinking than voting.

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?
Second, ? ? ? ? ? ? ?when electoral push comes to shove, all too many Americans will vote against the Constitution from crass self-interest. Aside from members of the Establishment themselves (a small number), and individuals who directly profit from (or at least believe that they profit from) fiat currency and fractional-reserve banking (a larger number), a great many people vote for the Establishment\'s Bolshevik and Menshevik candidates because of the governmental benefits these politicians promise them. Such people may know nothing about the Federal Reserve System; but the candidates they elect understand perfectly well that they cannot deliver ever-increasing benefits unless the central bank can open the spigots of fiat currency on demand (primarily, through monetization of public debt) whenever necessary.

? ? ? ? ? ?​
?
Third, ? ? ? ? ? ? ?many other Americans will never even consider a constitutional solution to this country\'s monetary and banking problems, because they are totally unaware that any such problems exist, or that the Constitution provides the necessary solutions. The Establishment has been remarkably successful in banishing the fundamental economic and legal issues of money and banking from political debate, and in defaming and demonizing advocates of strict constitutionalism in general, and of sound money and honest banking in particular.

? ? ? ? ? ?​
?
Fourth, ? ? ? ? ? ? ?even if patriotic Americans can overcome these obstacles before a crisis breaks out, they must still work out the difficult arithmetic of electoral success. To reform the monetary and banking systems along constitutional lines will require that Congress enact new legislation. So, patriots must elect a veto-proof Congress (two-thirds of each House), or a majority in both Houses plus a free-market, constitutionalist President, or (better yet) both. See Article I, Section 7, Clause 2.

? ? ? ? ? ?​
?
A mere majority in both Houses of Congress, even along with a sympathetic President, though, may not be enough. True, in Section 30 of the Federal Reserve Act of 1913, Congress reserved the right \"to amend, alter, or repeal\" the Federal Reserve System at any time. Statutes at ? ? ? ? ? ? ?Large, Volume 38, page 275. But the bankers will fight with ferocity and fanaticism any attempt to strip them of their special privileges. And the Establishment\'s kangaroo judges will bend their every dishonest effort to throw up legalistic roadblocks. Therefore, reform will require Congressional majorities sufficient to impeach, convict, and remove the black-robed miscreants--which means a majority in the House of Representatives and two thirds of the Senate. See Article I, Section 2, Clause 5, and Article I, Section 3, Clauses 6 and 7.

? ? ? ? ? ?​
?
What is the likelihood of achieving any of these necessary goals in the near future? Perhaps not so vanishingly small as to condemn the attempt as impossible. DVM SPIRO SPERO. Yet small enough to question its plausibility or practicality, and to compel a search for viable alternatives that can be put into operation now.

?
Americans must face the hard fact that, as far as money and banking are concerned, this country and the political class that misrules it have come to a final parting of the ways. A basic principle of American political ? ? ? ? ? ? ?jurisprudence is that ? ? ? ?
? ? ? ?
? ? ? ? ? ? ? ? ? ? ? ?
[a]ll [citizens] alike owe allegiance to the government, and the government owes to them a duty of protection. These are reciprocal obligations, and each is a consideration for the other.
?
? ? ? ? ? ? ? ?

? ? ? ? ?​
?​
? ? ? ?​
<span style=\'font-family:Georgia, Times New Roman, Times, serif\'>Therefore, if before a monetary and banking crisis breaks out Americans cannot remove the individuals who befoul the offices of the General Government, they must find other ways--always, of course, within the Constitution--to protect themselves and their country while there still may be time.



?
 

StarLord

Senior Member
Messages
3,187
Re: World Finance Watch

This is no joke Cary. If you call your Credit Card company in the evening or weekends, chances are you will be talking to someone in either Sri Lanka or India. Why waste money paying normal wages if you don't have to right? Those companies over in India go afew steps further, the 'operators' standing by for your call, are grouped according to areas and typically will answer calls from specific areas in the states. They are trained with current events, news even weather reports for those areas and local speech patterns. Some of the best have trained so well that it may be difficult to pick up on their accents.

SBC, one of the largest telephone moguls out on the west coast has jumped on the international work force wagon. I recently had problems with our server and was connected to a tech in india on the weekend...

The next harsh rip in reality is when we see that our 'fast food' was actually prepared in a foreign country?
 

CaryP

Senior Member
Messages
1,438
Re: World Finance Watch

Oh, I know it's no joke StarLord. People used to think I was crazy when I'd tell them about the trend of offshoring over the coming years back in 2000. Now I don't look so crazy. Well, on some economic matters anyway. LOL

I found a picture of the "enemy" in all this compliments of Elliot Wave International. He's real scary looking too.
 

CaryP

Senior Member
Messages
1,438
Re: World Finance Watch

I knew this thread was gonna be like "crack" for me. Tell me to stop if I get too carried away. I also wonder if anyone is looking much at all this. In hindsight, it will be obvious. Looking forward, hardly anyone seems to be able to see. Here's one on the housing and real estate bubble. That includes the mortgage bubble, but the charts are for real estate. Give it a look. Kinda scary.

Cary

http://www.freebuck.com/articles/mshedlock...06mshedlock.htm



It's a Totally New Paradigm

? By Mike Shedlock

?



San Diego Home Prices (with thanks to piggington)

?

The \"nothing can possibly go wrong\" talk is rampant again. It's not stocks this time but Real Estate. Let's take a look at some quotes from the New York Times Article Trading Places: Real Estate Instead of Dot-Coms?

Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that \"South Florida is working off of a totally new economic model than any of us have ever experienced in the past.\" He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.

\"I just don't think we have what it takes to prick the bubble,\" said Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an optimist during the 90's. \"I don't think prices are going to fall, and I don't think they're even going to be flat.\"

\"I look at this as a short-term investment,\" said Mr. Farquharson, 36, who works for a venture capital firm, \"and plan to unload it as soon as things look dangerous.\"

Now there's a laugh. By the time it looks dangerous will there be anyone looking to buy? Doesn't it look and feel dangerous now? Is he blind or am I?

MoneyPenny on Silicon Investor writes: \"I live in this fantasy land. SW Florida seems to believe that we are immune from any financial difficulty. I have a friend that is positive that real estate values will appreciate 20% a year for the next 10 years as Baby Boomers move to Florida. .... I stand in amazement but I am enjoying the amazing increase in my interior design business. I have never seen anything like it in my long career (37 years).\"

Free money shills are everywhere: \"Who Else Would Like to Learn How To Make Over $100,000, in 6 Months, With an Investment In Preconstruction Real Estate?\"

Who needs models? \"The demand for the product was so high that we could actually sell it without having a model to show them,\" said Glen Stegeman of Paseo Home Sales. \"It is kind of crazy. It's a good crazy. Obviously the demand is there,\" said Stegeman.

The real estate bubble is not just limited to the US either. Brad Sester talks about the Trans-Pacific Real Estate Bubbles in China and how that is related to the housing bubble in the US.

Is this really a totally new economic model or is it just the same old story: Mammoth greed and speculation fueled by easy money and an intense belief that \"nothing can possibly go wrong\"? In the meantime I am getting \"hate emails\" from people bragging about flipping in Florida. I guess we should all retire and flip houses, sight unseen of course. Who needs to see a model? Heck, any plot of land with a 5 year plan to \"build something really nice\" on it is all it takes these days to get people interested. Then again, perhaps random taunts out of the blue from \"true believers\" are another sign of topping action.

Talk of \"new paradigms\" or \"new economic models\" has been associated with every major bubble in history, typically near the peak. Wasn't it just 5 short years ago that Greenspan proclaimed the \"productivity miracle\" and everyone was counting \"clicks\" on dot coms as the \"new economic model\"?

Just as soon as I finished writing this post, I found a new quotation to add.
It's perfect.

Gregory J. Heym, the chief economist at Brown Harris Stevens, is not sold on the inevitability of a downturn. He bases his confidence in the market on things like continuing low mortgage rates, high Wall Street bonuses and the tax benefits of home ownership.
\\"It is a new paradigm\\" he said.

Scroll back up and take a look at that first chart again. Current talk of \"New Paradigms\" and \"New Economic Models\" should tell you exactly where we are and where we are ultimately headed. ?
 

Zoomerz

Member
Messages
220
Re: World Finance Watch

My "limited understanding" theory:

Oil is currently driving the inflation bubble...

As manufacturing fails to absorb the oil price increases and everything petro-based goes sky high (and commodity shipping costs get driven up), inflation starts driving up mortgage interest rates. With currently inflated housing prices coupled to double-digit interest rates, fewer people can afford to buy homes, driving prices down.

This forces many homeowners that are overextended into bankruptcy (where there is little relief anymore), and leaves the door wide open for the moneylenders to acquire even more cheap wealth...

Also, as inflation heats up, and discretionary income falls, wham, the faucet of new mortgages gets turned off, and we're back in recession, heading for banking catastrophes, and ultimately a depression that makes the 30's look like everyone won "Who Wants To Be A Millionaire"....

Z-
 

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